- Oil producers agree to preliminary production cut deal in Algiers
- Opec news sends risky assets soaring, yen in full retreat
- 'Twitter may be overvalued at this stage': Garnry
- USDJPY breakout places pair in view of important resistance
- Malaysian ringgit shoots higher on Opec agreement
By Michael McKenna
News of a preliminary production cut deal between Opec members was this morning's "shot heard 'round the world" as crude soared, equities rallied, the yen beat a conclusive retreat, and the Malaysian ringgit jumped against USD in a show of strength from Asia's only major oil nation.
Despite these very real and very pressing concerns, however, markets this morning chose to err on the side of jubilant certainty as stocks powered ahead in Asia and the USDJPY spiked on the rally in risk sentiment.
"USDJPY has now entirely erased its post-Bank of Japan, post-Federal Open Market Committee move," says Saxo Bank head of forex strategy John J Hardy, adding that the pair has broken determinedly free of what was becoming a fairly stagnant range and now faces key resistance levels to the upside.
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Source: Saxo Bank
In stocks, Saxo Bank head of equity strategy Peter Garnry reports that he has exited a short position in Subsea 7 on the Opec news; the offshore engineering and services firm gapped higher from below 82 NOK to just under 86 NOK today, but the move still left Garnry with a comfortable profit from the short trade's opening level of 91.85.
Beyond oil, Garnry also says that he is planning a move back into insurer Generali and sounds a note of caution on Twitter, whose shares have been on a rampage of late due to buyout speculation.
"We have seen a raft of negative analysis on Twitter," says Garnry, adding that potential bidders such as Disney, Alphabet, and Salesforce may have to pay a substantial premium should they wish to acquire the high-profile social media company.
In terms of reasons to rally, we will take soaring oil prices over, say, the media's entrails-reading following the US presidential debate or for that matter, the Federal Reserve's deciding that the US economy is too weak to abandon the easing party.
That said, the real impact of the Opec deal could fall decidedly short of the headline-driven celebration, so watch this space.
Restless in Riyadh? The Saudis may have cut a deal, but there remains
a lot of hedging behind the headlines. Photo: iStock
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